London-based fintech startup Wise pops on IPO debut, making the founders billionaires

Early this month, we wrote about Wise (formerly TransferWise), after the London-based fintech startup launched a new service that lets Indian users send money to 44 countries around the world, including places like Singapore, the U.K., the United States, the United Arab Emirates as well as countries in the Eurozone. In addition, Wise also announced the opening of a local office in Mumbai.

Wise was founded 11 years ago by two Estonian friends Kristo Käärmann and Taavet Hinrikus after their frustration with opaque bank charges on international money transfers. They later decided to find a new way to make cross-border transactions at the real exchange rate.

Yesterday, the startup went public and finally made its debut on the London Stock Exchange through a direct listing valuing the company at $11 billion and making Kristo Käärmann and Taavet Hinrikus billionaires. Käärmann’s stake in the business is worth approximately $2.1 billion, while Hinrikus’ is worth $1.2 billion.

Kristo Käärmann and Taavet Hinrikus are not only winners from Wise’s IPO debut. Early investors including Peter Thiel’s Valar Ventures ( Wise’s largest external shareholder), IA Ventures, Andreessen Horowitz’s, and Baillie Gifford.

Valar’s 10.2% stake is now worth about $1.1 billion, IA Ventures, which holds a 9.6% stake in Wise, now has over $1 billion of shares, Andreessen Horowitz’s 9.3% Wise stake is now worth $1 billion, and Baillie Gifford holds a 4.9% stake worth $536 million.

With remittances into low and middle-income countries reaching over $500 billion in 2020, Wise has grown to become one of the world’s largest fintech unicorns. Wise was founded in 2010 with the goal of making international money transfers cheaper and easier. Today, Wise enables users to send money to over 70 countries.

Unlike big fintech players like Moneygram, Wise claimed users can transfer money or spend abroad 6x cheaper than old-school banks, and receive money around the world for free, always with the real exchange rate and no hidden fees.

In February, the company rebranded to Wise to reflect its expanded product offering beyond international money transfer. It’s one of the few profitable startups with a recorded net profit of $7.9 million in 2018, while annual revenue almost doubled to £117 million.